Zoltan Erdey

Silver And Scarcity

– by Zoltan Erdey

For the South African investor, it is worthwhile to think of the present reality and data on silver mining in South Africa. According to www.gcis.gov.za, ‘South Africa does not have a primary silver mine and the metal is only produced as a by-product of other minerals. Silver was produced as a by-product from 13 gold operations, one uranium mine, two copper mines, and two platinum mines in 2008. Despite the vagaries of the global economy, production increased by 8.1% to 2.7 million ounces of silver in 2008’.

The most recent data that I was able to source puts the total silver mined in South Africa at 66 metric tonnes or 2.1 million ounces, worth about R550 million (at the spot price of R260).

Silver is scarce!
To put this into a global perspective, South Africa produces less silver in a year than the United States Mint required to produce American Silver Eagles in the month of April this year (the figure was 4 million ounces).
More importantly, what this communicates to me as a silver investor is just how scarce silver actually is. For example, Forbes estimated our Deputy President Cyril Ramaphosa’s wealth to be almost R7 billion. This means that Mr Ramaphosa could purchase South Africa’s yearly silver production 12 times over, or, purchase every ounce of silver mined over the next 12 years. But on a more serious note, it seems to me that even if silver investing becomes more mainstream here in South Africa, the availability of locally mined silver for investment purposes will be relatively ‘petite’; less than 1/10 ounces of silver per adult per year.

What is the Christian perspective?
As Christians, it is important to be aware of the concept of scarcity. In Revelation 6:5-6, we see a prophecy of scarcity, where basic foods (grain) cost more than luxury items (olive oil and wine). In Genesis 41:54-55, seven years of famine and scarcity comes upon the entire country, just as Joseph had said. But through his obedience to God, Joseph become a perfect exemplar of a man of God preparing wisely for times when things that perhaps appear to be available in abundance will become scarce. He became a beacon of God’s provision to his family and other nations.

Operating through wisdom
Perhaps we would be wise to set aside a small portion of our savings or investment in the form of silver, for when paper currency becomes scarce or even worthless (think of hyperinflation in Europe after World War II), real money will become the perfect ministry tool for continuing to feed our families and extend God’s Kingdom on earth.